Boeing appoints aviation veteran Kelly Ortberg as chief executive and posts wider Q2 loss

Troubled US plane maker reports $1.4 billion loss and says new boss will start on August 8

New Boeing chief Kelly Ortberg steps in at a time when the plane maker has been dealing with a safety and quality crisis. Bloomberg

Boeing has appointed aviation industry veteran and former Rockwell Collins boss Kelly Ortberg as its new president and chief executive to turn around the troubled plane maker, which posted a second-quarter loss on Wednesday.

After a month-long search for a new leader, Mr Ortberg will start his role on August 8, succeeding Dave Calhoun, who announced in March that he intended to retire from the company after serving in the role since January 2020.

Boeing's stock price rose as much as 2.7 per cent following the announcement of a new chief executive, a move that ended months of uncertainty.

The US company recorded a net loss of $1.4 billion in the April to June period, compared to a loss of $149 million in the same quarter last year, as it burnt through more cash, Boeing said on Wednesday.

Revenue decreased 15 per cent year-on-year to $16.8 billion in the second quarter as its commercial planes and defence businesses lost money.

"The board conducted a thorough and extensive search process over the last several months to select the next CEO of Boeing and [Mr] Kelly has the right skills and experience to lead Boeing in its next chapter," said Steven Mollenkopf, chairman of Boeing's board of directors.

"[Mr] Kelly is an experienced leader who is deeply respected in the aerospace industry, with a well-earned reputation for building strong teams and running complex engineering and manufacturing companies."

Mr Calhoun will serve as a special adviser to the board of directors until March 2025, Mr Mollenkopf said in a message to employees.

Mr Ortberg, 64, steps in at a time when Boeing has been dealing with a safety and quality crisis, after a door panel on a 737 Max 9 jet blew off in mid-air in January, leading to a slowdown in production of its best-selling plane, and increased regulatory and legal scrutiny.

"There is much work to be done and I'm looking forward to getting started," Mr Ortberg said.

"Boeing has a tremendous and rich history as a leader and pioneer in our industry and I'm committed to working together with the more than 170,000 dedicated employees of the company to continue that tradition, with safety and quality at the forefront."

The company's new leader is expected to focus on leading the company through its safety and quality crisis, regulatory obstacles and legal scrutiny, even as the US plane maker attempts to catch up with European rival and currently the world's biggest aircraft manufacturer, Airbus.

The industry veteran's aerospace career spans more than 35 years and features several executive positions. He began in 1983 as an engineer at Texas Instruments, then joined Rockwell Collins in 1987 as a programme manager and held leadership positions at the company before becoming its president and chief executive in 2013. After five years of leading Rockwell Collins, he steered the company's merger with United Technologies and RTX until his retirement in 2021.

He has served on the board of directors of RTX. Additionally, he serves on the board of technology company Aptiv. He is also the former chairman of the Aerospace Industries Association's board of governors.

His background may be an encouraging sign for industry watchers who have criticised Boeing for placing a bigger emphasis on finance rather than on engineering quality in recent years.

Mr Ortberg was appointed to the role ahead of several contenders, including Spirit AeroSystems chief executive Pat Shanahan and Boeing Commercial Airplanes chief executive Stephanie Pope.

Robert Stallard, analyst at Vertical Research Partners, described Mr Ortberg as a "very good hire by Boeing".

"While he may not be as well known as, say, Larry Culp (GE) or Dave Gitlin (Carrier), in our experience Kelly was an excellent CEO of Rockwell Collins," Mr Stallard said in a research note.

"What he brings to the party is not only a wealth of A&D [analysis and design] experience, but also a track record of running a company with an excellent corporate culture. Clearly, there are a massive number of problems at Boeing, but with Kelly as CEO, we think there is at least a chance of fixing them."

Boeing on Wednesday announced second-quarter results that included burning through $4.33 billion in cash during the period, reflecting lower commercial jet deliveries as it reduced output at its factories.

The company racked up debt of $57.9 billion, up from $47.9 billion at the beginning of the quarter, due to the issuance of new debt, it said. It also has access to credit facilities of $10 billion, which remain undrawn.

"Despite a challenging quarter, we are making substantial progress strengthening our quality management system and positioning our company for the future," Mr Calhoun said.

"While we have more work ahead, the steps we're taking will help stabilise our operations and ensure Boeing is the company the world needs it to be. We are making important progress in our recovery and will continue to build trust through action and transparency."